Planning for Minor Children

If something happens to me, what is going to happen to my children?

If you have minor or disabled children, it is even more important that you have an estate plan to protect them. If you have young children, you may need to provide for special resources for your spouse to handle financial and legal matters. You should also consider the possibility of both you and your spouse dying while your child is a minor. A proper estate plan should designate both the persons you would prefer to manage your assets and the guardian who will be best for the upbringing of your children. Otherwise, the decision as to who will manage your finances and raise your children will be left to a judge to determine. Your children's guardian does not need to be the same person in charge of your finances. It may be appropriate for you to purposely designate different persons.

Outright inheritances even to adult children can be a huge mistake. Your children can be adversely affected by lawsuits, divorce or just their own bad decisions. Instead of outright gifts, your assets can be placed in trust and distributed based a number of factors you designate, like their age, needs, or other events. You can even use an "incentive trust" which makes certain distributions to your children to encourage good behavior or higher education. The last thing you would want to do is leave your children with substantial assets before they are mature enough to invest them properly. You can even set up a trust for your individual retirement accounts (IRA) so that the annual IRA distributions to the trust can be professionally managed, not require a guardian for a minor child, and be distributed to the child in the discretion of the trustee.